Excited calls for a bull market return have faltered, especially after the bulls failed to push the price above $46,000 on March 31.

Data from TradingView shows an attempt to push prices A move above $47,500 was flatly rejected by the bears, which sent the leading cryptocurrency down to nearly $45,000.

Chart / 1 hour. Source: TradingView

Here's the potential cause and what some market analysts are saying about the price drop for BTC and whether traders should take further losses or prepare for another move higher.

The reason why Bitcoin price dropped to $45,000

dropped more than $2,500 from $47,500 to nearly $45,000 in 4 hours after news that the EU would disrupt innovation in space . Today, the European Parliament voted in favor of banning 'unhosted wallets' in the European Union.

In their terminology, an unhosted wallet is a non-custodial wallet entirely managed by an individual. These include cold wallets like Ledgers, Trezor, and SafePal, as well as hot wallets like , , MEW and many other wallets. The only crypto wallets allowed will be those held by exchanges that require all users to complete a KYC check. KYC stands for Know Your Customer and is a centralized financial industry term for protection against money laundering.

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If you want to use an unhosted wallet, you must register it with an exchange while also revealing your entire identity. One Twitter user expressed frustration:

“The EU Parliament vote on TFR was truly disappointing and posed a great threat to individual privacy and the use of self-custodial wallets in the EU. It introduces unfeasible wallet verification requirements and unwarranted reporting requirements against crypto companies that could have major adverse effects on citizens and companies in the region. Fortunately, we still have tripartite talks coming up to prevent the worst.”

The 'unhosted wallet' will not be banned from existing in the European Union, but you will not be able to interact with an exchange to convert your crypto to fiat or vice versa.

Companies will have nine months to adapt to the new ruling and then 18 months to ensure they are fully compliant with the new regulations. Are there any companies? Which EU will stay in the EU after this ruling is issued is still a matter of debate. Given the nature of the industry, they may move outside of Europe to comply with these regulations. Unattended wallets can't be completely banned quickly due to decentralization by design.

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Bitcoin's Next Price Action

Not all traders are caught by the bearish move Bitcoin on Thursday, including analyst 'IncomeSharks', who posted the following chart before the price drop noted that “4h looks like it wants to correct a bit.”

“This is not me being bearish, I just see 3 reasons why a small correction makes sense. The supertrend is flat, BTC is likely to retest this breakout and possibly bounce at the trendline. Good time for me to take profits.”

BTC/BTC 4-hour chart. Source: Twitter

The next support levels available to watch have been shown by analyst Caleb Franzen in the following chart showing Bitcoin's 21-day, 55-day, and 200-day exponential moving averages (EMAs):

“Sometimes it helps if you remove all the noise, remove the price structure analysis and just look at the exponential moving averages. All of which are potential support for Bitcoin, giving us a range of $42,000 – $45,000.”

BTC/USD 1-day chart. Source: Twitter

A more macro view of what happens next for Bitcoin has been provided by analyst 'BTCFuel', who posted the following chart comparing BTC price action in 2012 to the current movement and suggests Noting that “after rallying 28% in the last 2 weeks and breaking a major resistance, some sideways consolidation should be good for Bitcoin.”

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“In the coming months, I believe Bitcoin will increase slowly and steadily like 2012. But the going to get worse.”

BTC/USD price in 2012 vs. BTC/USD price in 2022. Source: Twitter

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